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Taking wife off residential mortgage to avoid 2nd home stamp duty
So me and my wife have a joint mortgage on the home we live in. I have a BTL on a second property. We are interested in getting another BTL to avoid paying stamp we were thinking removing my wife off the residential mortgage so she can buy the new property under her name. What are the pros and cons for thr above.
Comments
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Con - it won’t work and the higher rate of SDLT will still apply to the purchase.sukh38 said:Hi all,
So me and my wife have a joint mortgage on the home we live in. I have a BTL on a second property. We are interested in getting another BTL to avoid paying stamp we were thinking removing my wife off the residential mortgage so she can buy the new property under her name. What are the pros and cons for thr above.Pros - none3 -
@sukh38 I'm afraid that won't work. For married couples, if either of them owns more than one residential property they may pay the higher rates when purchasing another one. What you outlined would only work for couples that aren't married or in a civil partnership.
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You'd need to get divorced too.sukh38 said:Hi all,
So me and my wife have a joint mortgage on the home we live in. I have a BTL on a second property. We are interested in getting another BTL to avoid paying stamp we were thinking removing my wife off the residential mortgage so she can buy the new property under her name. What are the pros and cons for thr above.5 -
both husband and wife count as one unit for SDLT purposes.
If you’re married or in a civil partnership
The rules apply to you both as if you were buying the property together, even if you’re not.
If either of you individually have to pay the higher rates, you must pay the higher rates for the transaction as a whole (unless you’re permanently separated).
https://www.gov.uk/guidance/stamp-duty-land-tax-buying-an-additional-residential-property
"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
Thanks all0
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So you will have to pay the extra 3% stamp duty and will struggle to get a new BTL purchase done before the 31st of March.
However this expense is Tax deductible as part of your letting business.
What you can do is buy as Tenants in common so the lower rate taxpayer owns say 80% or 90% of the property while the higher rate taxpayer owns 20/10%0 -
Not deductible from income only against capital gainsAny posts on here are for information and discussion purposes only and shouldn't be seen as (financial) advice.1
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